Good morning Desmond. Most of them go just fine, but if the LO isn't knowledgeable, every loan is a problem.

Just that the home insepction will be more stringent that if on a conventional loan. For instance, all stairs with three of more steps need to have a railing.

A check for you seller in the end will be the same. The big awareness should be if there are repairs. 

I just want to make sure the appraisal comes in, because if it doesn't, we are going to be cutting out a large portion of the buyer pool since the value sticks with the property.

When i list home, i go through it with the seller before showings even start to know if that home can or cant go fha. If not, will teh seller bring it up to par? if not no fha. 

FHA isn't as bad as many agents make it out to be. If house is priced rignt and in decent condition, FHA financing should work.

If the property is in good shape, no problem!

If it is a condo I make sure it is on the approved list.

I don't see any lightbulbs in such a situation since FHA loans are not offered in our great land.

Know if your property has any issues that don't meet FHA criteria. Same for VA and some other loan programs. they each have some items that can nix the funding. Discover those early and they can often be remedied.

I do not mind if the property is FHA approved. If there is no better offer and the property appraised accordingly, we are good. 

 I think it has to do a lot with the lender you're dealing with ....

Desmond Neoh - all loans that can close for your listings ARE good. FHA are little more strict for home inspection, I believe.

And for condos - FHA approval is a requirement.

FHA loans are usually not problematic, but the appraisal can be.  

If the property fails to appraise, an FHA buyer is not likely to have the funds to make up an appraisal deficit or even meet in the middle.

Additionally, the FHA case number is married to that property and so is the value that appraiser comes up with even if it's clearly flawed.  The FHA appraisal would apply to a new FHA buyer.

The appraiser may submit a list of FHA required repairs.  The list, if there is one, is most often reasonable and on rare occasions outrageous.  In my career, I've had one outrageous list and three bad appraisals, two of which were in the last year.

Most FHA transactions are good, but when they're bad, they're pretty bad. 

If it's a site built home in decent condition that appaises . . . all good. Manufactured homes need engineering certs.

Great answers you got. 

Best of luck.

I see few advantages.

I always groan when I see an FHA offer. I don't know how it is in the rest of the country, but here the appraisers/appraisals are difficult to get through, no matter how well priced the property is.

You have to be sure there are no FHA issues for the appraiser to find - peeling/chipped paint, exposed electrical outlets, extensions for the gutters.

If a home has a ton of deferred maintenance, peeling paint, stairs missing railings, or other safety hazards, that's the "no go" zone for FHA.  Aside from that, as long as a property is FHA-eligible, there should be no "lightbulbs" or red flags ---- FHA is a great program that unfortunately gets a bad rep.

FHA financing is a blessing for the families that need it. A good agent and a good mortgage loan officer will make the transactions successful.

They go by guidelines i.e. a Gov check-off list that determines eligibility. Smoke alarms, co2 detectors, functional appliances, no in your face repairs. Generally a good first impression passes with no problem. Ck guidelines

No lightbulb.  Verify details of "pre-qual" with the Buyers Lender.  Seller decides.  If proceeds - and FHA appraisal (inspection) finds things to repair - negotiate with Buyer - if it doesn't work out - move on to another Buyer with copy of the FHA appraisal (inspection) in hand - and disclose in contract what won't be repaired.  End of story.

Usually as smooth as any other loan, depending on the lender and appraisal.

Concerns with FHA

How much skin does buyer have in the game?

Are any concerns present in the house that FHA will make a issue?

Closing costs deferred to seller.

Historic record.

Limits on 'out-side' money.

All things equal, FHA will lose.

If FHA is the only player at the time, you play the cards you have.

I don't see red flags with FHA loans... especially if I know who the buyer's lender is. In certain price points, I expect that a big percentage of buyers will be doing FHA.

 FHA is in their own world when comes to inspections. I often ask are they getting FHA or conventional loans. FHA requires things that conventional does not.

Depends on the condition of the property and if there are competing offers.  Sometimes that FHA offer looks like gold.

if it's a flip there could be an issue dependant on percentage of new price versus old closing price.

I immediately think of peeling paint, broken windows and a new roof.

We are having a lunch and learn at our office to discuss this very soon. For buyers and sellers we need to be aware of this information.